Is it legal for your boss to take tips? Pay less than minimum wage? What California law says

Many workers in California rely on tips to make a living wage.

That’s the case for bartenders, waiters, delivery drivers and other employees.

Is it legal for your boss to take a percentage of your tips — or all of them? Can tipped employees get paid less than minimum wage?

In a recent Reddit post, a California restaurant employee asked whether their manager can collect the tips they earned and redistribute them to co-workers.

“I thought cash tips were the sole property of the employee that received them, and we can’t be compelled to hand them over,” Reddit user Crazy_Mine_4547 wrote.

California has laws dealing with tips and tip pooling. Here’s what you need to know:

Is it legal for your boss to take your tips in California?

The Fair Labor Standards Act prohibits managers and supervisors from taking an employee’s tips.

According to California labor law, managers and supervisors can only keep tips they receive directly from customers for services they provide.

“For example, a restaurant manager who serves their own tables may keep their own tips from customers they served but would not be able to receive other employees’ tips by participating in a tip pool,” the Fair Labor Standards Act says.

California Labor Code Section 351 “prohibits employers and their agents from sharing in or keeping any portion of a gratuity left for or given to one or more employees by a patron.”

The law further states that gratuities are the sole property of “the employee or employees to whom they are given,” according to the California Department of Industrial Relations.

Can California employers pay less than minimum wage?

California law requires employers to pay tipped employees at least the state’s minimum wage of $16.50 per hour, according to the industrial relations department.

Employers are exempt from paying less than the required minimum wage under these circumstances:

• Working with outside salespeople
• Individuals who are the parent, spouse or child of the employer
• Apprentices regularly indentured under the State Division of Apprenticeship Standards.

There is an exception for “learners, regardless of age,” the state Department of Industrial Relations said.

These employees may be paid no less than 85% of the minimum wage “rounded to the nearest nickel during their first 160 hours of employment in occupations in which they have no previous similar or related experience,” the agency said.

Exceptions also exist for employees who are mentally or physically disabled, or both, and for nonprofit organizations such as sheltered workshops or rehabilitation facilities that employ disabled workers.

Can employers deduct tips from my paycheck?

Employers can’t take your tips or deduct money from your wages because of the tips you earn, according to state law.

An employer cannot also credit your tips against the money you’re owed.

“Businesses are barred from forcing workers to share any portion of tips with them or from offsetting tips against regular wages,” San Francisco-based McCormack Law Firm said. “Employers must maintain thorough records of all tips received. State labor regulators take tip law violations very seriously.”

Is tip pooling legal in California?

Tip pooling, an arrangement in which a group of employees receives a percentage of all tips earned, is legal in California as long as the pool does not include managers, according to Shouse Law Group.

Managers can only participate in the tip pool if they perform the same work as their employees, the law firm said.

In addition, the tip pool policy must be fair and reasonable.

Employers can require that you share your tips with other staff members “so long as the employees that share in the tip pooling policy are employees to whom the tip was paid, given or left for,” state labor code says.

How do I file a wage complaint in California?

Complaints involving minimum wage or tips should be filed with the U.S. Department of Labor. Claims can be filed online, by email, mail or in person at the nearest district labor commissioner’s office.

To file a complaint, you must provide the following information:

• Your name

• Your address and phone number

• The name of the company where you work or worked

• Location of the company

• Phone number of the company

• Manager or owners name

• Type of work you did

• How and when you were paid

“Any additional information that you can provide such as copies of pay stubs, personal records of hours worked, or other information on your employers pay practices are helpful,” the federal labor department said.

You can file a complaint by filling out a form online at dol.gov or by calling 1-833-526-4636.

This story was originally published February 13, 2025 at 5:00 AM with the headline "Is it legal for your boss to take tips? Pay less than minimum wage? What California law says."